Technology
Blackbaud Announces 2023 Fourth Quarter and Full Year Results
Published
3 years agoon
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Full Year 2023 Financial Results Met or Exceeded Financial Guidance Ranges; Blackbaud Announces Refreshed Capital Allocation Strategy
CHARLESTON, S.C., Feb. 12, 2024 /PRNewswire/ — Blackbaud (NASDAQ: BLKB), the leading provider of software for powering social impact, today announced financial results for its fourth quarter and full year ended December 31, 2023.
“The fourth quarter concluded a year of substantial transformation for Blackbaud,” said Mike Gianoni, president, CEO and vice chairman of the board, Blackbaud. “Approximately a year and a half ago, we implemented our five-point operating plan, and it has put our company on a clear trajectory of improving performance. During the year, we delivered innovative new products and feature enhancements to our customers, made significant progress modernizing our software contract renewal terms, and delivered excellent fundraising results for our customers. Our financial results were strong, and we were able to expand and replenish our previous stock repurchase program and begin repurchasing shares. Looking ahead to 2024, we expect to be a Rule of 40 company for the full year and will remain focused on delivering significant, sustainable value for our shareholders.”
Fourth Quarter 2023 Results Compared to Fourth Quarter 2022 Results:
GAAP total revenue was $295.0 million, up 7.4%, with $287.4 million in GAAP recurring revenue, up 8.4%. GAAP recurring revenue was 97% of total revenue.Non-GAAP organic recurring revenue increased 8.4%.GAAP income from operations was $32.3 million, inclusive of security incident-related costs of $4.8 million, with GAAP operating margin of 11.0%, an increase of 1,670 basis points.Non-GAAP income from operations was $83.8 million, with non-GAAP operating margin of 28.4%, an increase of 840 basis points.GAAP net income was $5.4 million, with GAAP diluted earnings per share of $0.10, up $0.51 per share.Non-GAAP net income was $62.2 million, with non-GAAP diluted earnings per share of $1.14, up $0.46 per share.Non-GAAP adjusted EBITDA was $99.3 million, up $31.3 million, with non-GAAP adjusted EBITDA margin of 33.6%, an increase of 890 basis points.GAAP net cash used in operating activities was $(3.3) million, inclusive of security incident-related payments of $54.9 million. GAAP net cash used in operating activities decreased $17.4 million and GAAP operating cash flow margin was (1.1)%, a decrease of 620 basis points.Non-GAAP free cash flow was $(18.6) million, inclusive of security incident-related payments of $54.9 million. Non-GAAP free cash flow decreased $14.9 million and non-GAAP free cash flow margin was (6.3)%, a decrease of 500 basis points.Non-GAAP adjusted free cash flow was $36.3 million, an increase of $28.7 million, with non-GAAP adjusted free cash flow margin of 12.3%, an increase of 950 basis points.
“The fourth quarter demonstrated continued progress on our five-point operating plan, which has transformed our financial results,” said Tony Boor, executive vice president and CFO, Blackbaud. “In the fourth quarter, revenue grew 7.4% with 33.6% adjusted EBITDA margin for a Rule of 40 of 41.0%. For the full year 2023, we met our guidance range for revenue and exceeded the high end of our guidance ranges for adjusted EBITDA margin, non-GAAP EPS and adjusted free cash flow. The mid-point of our 2024 financial guidance calls for approximately 7% revenue growth and 33% adjusted EBITDA margin to achieve Rule of 40 for the full year. Adjusted free cash flow of $264 million at the midpoint of guidance represents a 22.3% adjusted free cash flow margin and a significant improvement of 300bps over 2023. With our recently announced $500 million stock repurchase authorization, we plan to offset the dilution from annual stock-based compensation, while also opportunistically pursuing additional share repurchases, accretive M&A, and debt repayment to maximize value for our stockholders.”
An explanation of all non-GAAP financial measures referenced in this press release, including the Rule of 40, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of the company’s non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
Recent Company Highlights
Blackbaud released Prospect Insights Pro for Blackbaud Raiser’s Edge NXT®, supporting advanced fundraising organizations with more AI-driven recommendations, including planned gift likelihood and detailed wealth and asset data.Blackbaud announced the newest cohort of its Social Good Startup Program, welcoming eight new startups that are bringing cutting edge technology to the social impact sector.In the TrustRadius 2023 “Best Of” Awards, Blackbaud Raiser’s Edge NXT® and Blackbaud Financial Edge NXT® were recognized for Best Value, Best Feature Set and Best Relationship.Newsweek honored Blackbaud on its Excellence 1000 2024 Index, as well as its list of America’s Most Responsible Companies for the third consecutive year, recognizing the company’s commitment to social responsibility.Blackbaud was named Corporate Governance Team of the Year in the small-mid cap category at the 2023 Corporate Governance Awards, hosted by Governance Intelligence. The awards recognize outstanding achievements in governance, risk and compliance.Blackbaud appointed Kristian Talvitie, executive vice president and CFO of PTC Inc., to its board of directors. Talvitie brings 30 years of experience with a diverse background ranging across corporate finance, FP&A, sales, marketing and communications.Blackbaud announced a reauthorized, expanded and replenished $500M stock repurchase program. about Blackbaud’s recent highlights.
Visit www.blackbaud.com/newsroom for more information about Blackbaud’s recent highlights.
Full-Year 2023 Results Compared to Full-Year 2022 Results:
GAAP total revenue was $1.1 billion, up 4.5%, with $1.1 billion in GAAP recurring revenue, up 5.9%.Non-GAAP organic recurring revenue increased 6.3%.GAAP income from operations was $44.7 million, inclusive of security incident-related costs of $53.4 million, with GAAP operating margin of 4.0%, an increase of 670 basis points.Non-GAAP income from operations was $294.1 million, with non-GAAP operating margin of 26.6%, an increase of 750 basis points.GAAP net income was $1.8 million, with GAAP diluted earnings per share of $0.03, up $0.91 per share.Non-GAAP net income was $213.6 million, with non-GAAP diluted earnings per share of $3.98, up $1.29 per share.Non-GAAP adjusted EBITDA was $356.5 million, up $93.9 million, with non-GAAP adjusted EBITDA margin of 32.2%, an increase of 740 basis points.GAAP net cash provided by operating activities was $199.6 million, inclusive of security incident-related payments of $78.0 million. GAAP net cash provided by operating activities decreased $4.3 million and GAAP operating cash flow margin was 18.1%, a decrease of 120 basis points.Non-GAAP free cash flow was $135.5 million, inclusive of security incident-related payments of $78.0 million. Non-GAAP free cash flow increased $2.7 million and non-GAAP free cash flow margin of 12.3%, a decrease of 30 basis points.Non-GAAP adjusted free cash flow was $213.5 million, an increase of $59.8 million, with non-GAAP adjusted free cash flow margin of 19.3%, an increase of 480 basis points.
Financial Outlook
Blackbaud today announced its 2024 full year financial guidance:
Non-GAAP revenue of $1.170 billion to $1.200 billionNon-GAAP adjusted EBITDA margin of 32.5% to 33.5%Non-GAAP earnings per share of $4.12 to $4.38Non-GAAP adjusted free cash flow of $254 million to $274 million
Included in its 2024 full year financial guidance are the following assumptions:
Non-GAAP annualized effective tax rate is expected to be approximately 24.5%Interest expense for the year is expected to be approximately $34 million to $38 millionFully diluted shares for the year are expected to be approximately 53.5 million to 54.5 millionCapital expenditures for the year are expected to be approximately $65 million to $75 million, including approximately $60 million to $70 million of capitalized software and content development costs
Blackbaud has not reconciled forward-looking full-year non-GAAP financial measures contained in this news release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
In order to provide a meaningful basis for comparison, Blackbaud uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the previously disclosed Security Incident discovered in May 2020 (the “Security Incident”). Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022. For full year 2024, Blackbaud currently expects net cash outlays of $8 million to $13 million for ongoing legal fees related to the Security Incident. In line with the company’s policy, all associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Please refer to the section below titled “Non-GAAP Financial Measures” for more information on Blackbaud’s use of non-GAAP financial measures.
Stock Repurchase Program
As of January 19, 2024, Blackbaud had approximately $499 million remaining under its approved common stock purchase program that was authorized in January 2024.
Conference Call Details
What:
Blackbaud’s Fourth Quarter and Full Year 2023 Conference Call
When:
February 13, 2024
Time:
8:00 a.m. (Eastern Time)
Live Call:
1-877-407-3088 (US/Canada)
Webcast:
About Blackbaud
Blackbaud (NASDAQ: BLKB) is the leading software provider exclusively dedicated to powering social impact. Serving the nonprofit and education sectors, companies committed to social responsibility and individual change makers, Blackbaud’s essential software is built to accelerate impact in fundraising, nonprofit financial management, digital giving, grantmaking, corporate social responsibility and education management. With millions of users and over $100 billion raised, granted or managed through Blackbaud platforms every year, Blackbaud’s solutions are unleashing the potential of the people and organizations who change the world. Blackbaud has been named to Newsweek’s list of America’s Most Responsible Companies, Quartz’s list of Best Companies for Remote Workers and Forbes’ list of America’s Best Employers. A remote-first company, Blackbaud has operations in the United States, Australia, Canada, Costa Rica and the United Kingdom, supporting users in 100+ countries. Learn more at www.blackbaud.com, or follow us on X/Twitter, LinkedIn, Instagram, and Facebook.
Investor Contact
IR@blackbaud.com
Media Contact
media@blackbaud.com
Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the predictability of our financial condition and results of operations. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; cybersecurity and data protection risks and related liabilities; potential litigation involving us; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud’s investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Trademarks
All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.
Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. Blackbaud uses non-GAAP financial measures internally in analyzing its operational performance. Accordingly, Blackbaud believes these non-GAAP measures are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance and trends and in comparing its financial results from period-to-period with other companies in Blackbaud’s industry, many of which present similar non-GAAP financial measures to investors. However, these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies.
The non-GAAP financial measures discussed above exclude the impact of certain transactions that Blackbaud believes are not directly related to its operating performance in any particular period, but are for its long-term benefit over multiple periods. Blackbaud believes these non-GAAP financial measures reflect its ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.
While Blackbaud believes these non-GAAP measures provide useful supplemental information, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures.
Beginning in 2024, we intend to update the non-GAAP tax rate we apply when calculating non-GAAP net income and non-GAAP diluted earnings per share in future periods. Since the first quarter of 2018, for the purposes of determining non-GAAP net income, we have utilized a non-GAAP tax rate of 20.0% in our calculation of the assumed non-GAAP income tax provision. We intend to adjust this rate to 24.5% to better reflect our periodic effective tax rate calculated in accordance with GAAP and our current expectations. The increase in our non-GAAP tax rate is primarily driven by increases in income tax rates in jurisdictions we operate in. Furthermore, as profitability increases, the effect of tax impacting items, including research and development credits, lessens such that our assumed non-GAAP tax rate moves closer to the statutory rate. The non-GAAP tax rate utilized in future periods will be reviewed annually to determine whether it remains appropriate in consideration of our financial results including our periodic effective tax rate calculated in accordance with GAAP, our operating environment and related tax legislation in effect and other factors deemed necessary. All fourth quarter and full year 2023 measures of the tax impact related to non-GAAP net income and non-GAAP diluted earnings per share included in this news release are calculated under Blackbaud’s historical methodology.
Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment. In addition, and in order to provide a meaningful basis for comparison, Blackbaud now uses non-GAAP adjusted free cash flow in analyzing its operating performance. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software and content development, and capital expenditures for property and equipment, plus cash outflows, net of insurance, related to the Security Incident. Blackbaud believes non-GAAP free cash flow and non-GAAP adjusted free cash flow provide useful measures of the company’s operating performance. Non-GAAP adjusted free cash flow is not intended to represent and should not be viewed as the amount of residual cash flow available for discretionary expenditures.
In addition, Blackbaud uses non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, in analyzing its operating performance. Blackbaud believes that these non-GAAP measures are useful to investors, as a supplement to GAAP measures, for evaluating the periodic growth of its business on a consistent basis. Each of these measures excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, each of these measures reflects presentation of full-year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period. In addition, each of these measures excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of its current business’ organic revenue growth and revenue run-rate.
Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software and content development costs; stock-based compensation; employee severance; acquisition and disposition-related costs; restructuring and other real estate activities; costs, net of insurance, related to the Security Incident; and impairment of capitalized software development costs.
Blackbaud, Inc.
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands, except per share amounts)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$ 31,251
$ 31,691
Restricted cash
697,006
702,240
Accounts receivable, net of allowance of $6,907 and $7,318 at December 31, 2023 and
December 31, 2022, respectively
101,862
102,809
Customer funds receivable
353
249
Prepaid expenses and other current assets
99,285
81,654
Total current assets
929,757
918,643
Property and equipment, net
98,689
107,426
Operating lease right-of-use assets
36,927
45,899
Software and content development costs, net
160,194
141,023
Goodwill
1,053,738
1,050,272
Intangible assets, net
581,937
635,136
Other assets
51,037
94,304
Total assets
$ 2,912,279
$ 2,992,703
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable
$ 25,184
$ 42,559
Accrued expenses and other current liabilities
64,322
86,002
Due to customers
695,842
700,860
Debt, current portion
19,259
18,802
Deferred revenue, current portion
392,530
382,419
Total current liabilities
1,197,137
1,230,642
Debt, net of current portion
760,405
840,241
Deferred tax liability
93,292
125,759
Deferred revenue, net of current portion
2,397
2,817
Operating lease liabilities, net of current portion
40,085
44,918
Other liabilities
10,258
4,294
Total liabilities
2,103,574
2,248,671
Commitments and contingencies
Stockholders’ equity:
Preferred stock; 20,000,000 shares authorized, none outstanding
—
—
Common stock, $0.001 par value; 180,000,000 shares authorized, 69,188,304 and
67,814,044 shares issued at December 31, 2023 and December 31, 2022, respectively;
53,625,440 and 53,068,814 shares outstanding at December 31, 2023 and December 31,
2022, respectively
69
68
Additional paid-in capital
1,203,012
1,075,264
Treasury stock, at cost; 15,562,864 and 14,745,230 shares at December 31, 2023 and
December 31, 2022, respectively
(591,557)
(537,287)
Accumulated other comprehensive (loss) income
(1,688)
8,938
Retained earnings
198,869
197,049
Total stockholders’ equity
808,705
744,032
Total liabilities and stockholders’ equity
$ 2,912,279
$ 2,992,703
Blackbaud, Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)
(dollars in thousands, except per share amounts)
Three months ended
December 31,
Years ended
December 31,
2023
2022
2023
2022
Revenue
Recurring
$ 287,381
$ 265,173
$ 1,071,520
$ 1,011,733
One-time services and other
7,630
9,584
33,912
46,372
Total revenue
295,011
274,757
1,105,432
1,058,105
Cost of revenue
Cost of recurring
127,897
125,300
470,455
463,449
Cost of one-time services and other
7,938
10,183
31,733
41,940
Total cost of revenue
135,835
135,483
502,188
505,389
Gross profit
159,176
139,274
603,244
552,716
Operating expenses
Sales, marketing and customer success
52,120
57,088
212,158
221,455
Research and development
38,602
38,177
153,304
156,913
General and administrative
35,356
58,895
189,938
199,908
Amortization
784
662
3,139
2,925
Total operating expenses
126,862
154,822
558,539
581,201
Income (loss) from operations
32,314
(15,548)
44,705
(28,485)
Interest expense
(8,473)
(9,891)
(39,922)
(35,803)
Other income, net
2,414
5
12,861
8,713
Income (loss) before provision (benefit) for income taxes
26,255
(25,434)
17,644
(55,575)
Income tax provision (benefit)
20,856
(4,175)
15,824
(10,168)
Net income (loss)
$ 5,399
$ (21,259)
$ 1,820
$ (45,407)
Earnings (loss) per share
Basic
$ 0.10
$ (0.41)
$ 0.03
$ (0.88)
Diluted
$ 0.10
$ (0.41)
$ 0.03
$ (0.88)
Common shares and equivalents outstanding
Basic weighted average shares
52,697,294
51,716,948
52,546,406
51,569,148
Diluted weighted average shares
54,439,689
51,716,948
53,721,342
51,569,148
Other comprehensive (loss) income
Foreign currency translation adjustment
$ 4,630
$ 7,906
$ 5,049
$ (16,160)
Unrealized (loss) gain on derivative instruments, net of tax
(14,459)
(1,684)
(15,675)
18,576
Total other comprehensive (loss) income
(9,829)
6,222
(10,626)
2,416
Comprehensive loss
$ (4,430)
$ (15,037)
$ (8,806)
$ (42,991)
Blackbaud, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Years ended
December 31,
(dollars in thousands)
2023
2022
Cash flows from operating activities
Net income (loss)
$ 1,820
$ (45,407)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
109,487
102,369
Provision for credit losses and sales returns
4,500
6,066
Stock-based compensation expense
127,762
110,294
Deferred taxes
(24,368)
(26,644)
Amortization of deferred financing costs and discount
1,775
2,364
Other non-cash adjustments
5,023
5,676
Changes in operating assets and liabilities, net of acquisition and disposal of businesses:
Accounts receivable
(3,237)
(7,340)
Prepaid expenses and other assets
16,851
26,235
Trade accounts payable
(18,576)
21,607
Accrued expenses and other liabilities
(30,275)
(2,386)
Deferred revenue
8,872
11,059
Net cash provided by operating activities
199,634
203,893
Cash flows from investing activities
Purchase of property and equipment
(4,685)
(12,289)
Capitalized software and content development costs
(59,443)
(58,774)
Purchase of net assets of acquired companies, net of cash and restricted cash acquired
(13)
(20,912)
Cash received in sale of business
—
6,426
Other investing activities
(250)
—
Net cash used in investing activities
(64,391)
(85,549)
Cash flows from financing activities
Proceeds from issuance of debt
293,200
211,000
Payments on debt
(374,595)
(310,740)
Stock issuance costs
—
(1,339)
Employee taxes paid for withheld shares upon equity award settlement
(35,867)
(36,376)
Change in due to customers
(6,812)
111,386
Change in customer funds receivable
(60)
380
Purchase of treasury stock
(18,831)
—
Net cash used in financing activities
(142,965)
(25,689)
Effect of exchange rate on cash, cash equivalents and restricted cash
2,048
(10,486)
Net (decrease) increase in cash, cash equivalents and restricted cash
(5,674)
82,169
Cash, cash equivalents and restricted cash, beginning of year
733,931
651,762
Cash, cash equivalents and restricted cash, end of year
$ 728,257
$ 733,931
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown above in the consolidated statements of cash flows:
(dollars in thousands)
December 31,
2023
December 31,
2022
Cash and cash equivalents
$ 31,251
$ 31,691
Restricted cash
697,006
702,240
Total cash, cash equivalents and restricted cash in the statement of cash flows
$ 728,257
$ 733,931
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(dollars in thousands, except per share amounts)
Three months ended
December 31,
Years ended
December 31,
2023
2022
2023
2022
GAAP Revenue
$ 295,011
$ 274,757
$ 1,105,432
$ 1,058,105
GAAP gross profit
$ 159,176
$ 139,274
$ 603,244
$ 552,716
GAAP gross margin
54.0 %
50.7 %
54.6 %
52.2 %
Non-GAAP adjustments:
Add: Stock-based compensation expense
4,416
3,109
16,658
14,436
Add: Amortization of intangibles from business combinations
13,099
11,686
52,463
48,492
Add: Employee severance
—
1,787
797
2,135
Subtotal
17,515
16,582
69,918
65,063
Non-GAAP gross profit
$ 176,691
$ 155,856
$ 673,162
$ 617,779
Non-GAAP gross margin
59.9 %
56.7 %
60.9 %
58.4 %
GAAP income (loss) from operations
$ 32,314
$ (15,548)
$ 44,705
$ (28,485)
GAAP operating margin
11.0 %
(5.7) %
4.0 %
(2.7) %
Non-GAAP adjustments:
Add: Stock-based compensation expense
32,094
26,635
127,762
110,294
Add: Amortization of intangibles from business combinations
13,883
12,348
55,602
51,417
Add: Employee severance
55
4,470
5,149
5,164
Add: Acquisition and disposition-related costs(1)(2)
657
430
7,456
6,135
Add: Restructuring and other real estate activities
—
—
—
71
Add: Security Incident-related costs, net of insurance(3)
4,780
26,516
53,426
55,723
Add: Impairment of capitalized software development costs
—
—
—
2,263
Subtotal
51,469
70,399
249,395
231,067
Non-GAAP income from operations
$ 83,783
$ 54,851
$ 294,100
$ 202,582
Non-GAAP operating margin
28.4 %
20.0 %
26.6 %
19.1 %
GAAP income (loss) before provision (benefit) for income taxes
$ 26,255
$ (25,434)
$ 17,644
$ (55,575)
GAAP net income (loss)
$ 5,399
$ (21,259)
$ 1,820
$ (45,407)
Shares used in computing GAAP diluted earnings (loss) per share
54,439,689
51,716,948
53,721,342
51,569,148
GAAP diluted earnings (loss) per share
$ 0.10
$ (0.41)
$ 0.03
$ (0.88)
Non-GAAP adjustments:
Add: GAAP income tax provision (benefit)
20,856
(4,175)
15,824
(10,168)
Add: Total non-GAAP adjustments affecting income from operations
51,469
70,399
249,395
231,067
Non-GAAP income before provision for income taxes
77,724
44,965
267,039
175,492
Assumed non-GAAP income tax provision(4)
15,545
8,993
53,408
35,098
Non-GAAP net income
$ 62,179
$ 35,972
$ 213,631
$ 140,394
Shares used in computing non-GAAP diluted earnings per share
54,439,689
52,923,158
53,721,342
52,207,573
Non-GAAP diluted earnings per share
$ 1.14
$ 0.68
$ 3.98
$ 2.69
(1)
Includes a $2.0 million noncash impairment of certain intangible assets held for sale during the twelve months ended December 31, 2022.
(2)
Includes noncash impairment charges incurred during the twelve months ended December 31, 2023 related to the sublease of our Washington, DC office location the lease of which was acquired during the EVERFI acquisition.
(3)
Includes Security Incident-related costs incurred during the three and twelve months ended December 31, 2023 of $4.8 million and $53.4 million, respectively, which includes approximately $1.0 million and $31.0 million, respectively, in settlements and recorded liabilities for loss contingencies, net of insurance recoveries during the same periods of $0.0 million, and during the twelve months ended December 31, 2022 of $26.5 million and $57.6 million, respectively, which included approximately $18.0 million and $23.0 million, respectively, in recorded aggregate liabilities for loss contingencies, net of insurance recoveries during the same period that were $0.0 million and $1.9 million, respectively. Recorded expenses consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims, negotiated settlements and accruals for certain loss contingencies. Not included in this adjustment were costs associated with enhancements to our cybersecurity program. For full year 2024, we currently expect net pre-tax expense of approximately $5 million to $10 million and net cash outlays of approximately $8 million to $13 million for ongoing legal fees related to the Security Incident. Not included in these ranges are our previous settlements or current accruals for loss contingencies related to the matters discussed below. In line with our policy, legal fees are expensed as incurred. As of December 31, 2023, we have recorded approximately $1.5 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain customers related to the Security Incident that we believe we can reasonably estimate. In connection with the settlement of the multi-state Attorneys General investigation (as previously disclosed on October 5, 2023), we paid $49.5 million during the fourth quarter of 2023. There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of December 31, 2023 because we are unable at this time to reasonably estimate the possible loss or range of loss. Each of these matters could, separately or in the aggregate, result in an adverse judgment, settlement, fine, penalty or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition.
(4)
Blackbaud applies a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share.
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)
(dollars in thousands)
Three months ended
December 31,
Years ended
December 31,
2023
2022
2023
2022
GAAP revenue
$ 295,011
$ 274,757
$ 1,105,432
$ 1,058,105
GAAP revenue growth
7.4 %
4.5 %
Less: Non-GAAP revenue from divested businesses(1)
—
(10)
—
(3,535)
Non-GAAP organic revenue(2)
$ 295,011
$ 274,747
$ 1,105,432
$ 1,054,570
Non-GAAP organic revenue growth
7.4 %
4.8 %
Non-GAAP organic revenue(2)
$ 295,011
$ 274,747
$ 1,105,432
$ 1,054,570
Foreign currency impact on non-GAAP organic revenue(3)
(1,284)
—
431
—
Non-GAAP organic revenue on constant currency basis(3)
$ 293,727
$ 274,747
$ 1,105,863
$ 1,054,570
Non-GAAP organic revenue growth on constant currency basis
6.9 %
4.9 %
GAAP recurring revenue
$ 287,381
$ 265,173
$ 1,071,520
$ 1,011,733
GAAP recurring revenue growth
8.4 %
5.9 %
Less: Non-GAAP recurring revenue from divested businesses(1)
—
(1)
—
(3,439)
Non-GAAP organic recurring revenue(2)
$ 287,381
$ 265,172
$ 1,071,520
$ 1,008,294
Non-GAAP organic recurring revenue growth
8.4 %
6.3 %
Non-GAAP organic recurring revenue(2)
$ 287,381
$ 265,172
$ 1,071,520
$ 1,008,294
Foreign currency impact on non-GAAP organic recurring revenue(3)
(1,157)
—
482
—
Non-GAAP organic recurring revenue on constant currency basis(3)
$ 286,224
$ 265,172
$ 1,072,002
$ 1,008,294
Non-GAAP organic recurring revenue growth on constant
currency basis
7.9 %
6.3 %
(1)
Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.
(2)
Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue and non-GAAP organic recurring revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth are calculated.
(3)
To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)
(dollars in thousands)
Three months ended
December 31,
Years ended
December 31,
2023
2022
2023
2022
GAAP net income (loss)
$ 5,399
$ (21,259)
$ 1,820
$ (45,407)
Non-GAAP adjustments:
Add: Interest, net
6,208
9,053
31,101
34,057
Add: GAAP income tax provision (benefit)
20,856
(4,175)
15,824
(10,168)
Add: Depreciation
3,142
3,444
13,043
14,086
Add: Amortization of intangibles from business combinations
13,883
12,348
55,602
51,417
Add: Amortization of software and content development costs(1)
12,183
10,447
45,296
38,975
Subtotal
56,272
31,117
160,866
128,367
Non-GAAP EBITDA
$ 61,671
$ 9,858
$ 162,686
$ 82,960
Non-GAAP EBITDA margin(2)
20.9 %
14.7 %
Non-GAAP adjustments:
Add: Stock-based compensation expense
32,094
26,635
127,762
110,294
Add: Employee severance
55
4,470
5,149
5,164
Add: Acquisition and disposition-related costs(3)
657
430
7,456
6,135
Add: Restructuring and other real estate activities
—
—
—
71
Add: Security Incident-related costs, net of insurance(3)
4,780
26,516
53,426
55,723
Add: Impairment of capitalized software development costs
—
—
—
2,263
Subtotal
37,586
58,051
193,793
179,650
Non-GAAP adjusted EBITDA
$ 99,257
$ 67,909
$ 356,479
$ 262,610
Non-GAAP adjusted EBITDA margin(4)
33.6 %
32.2 %
Rule of 40(5)
41.0 %
37.0 %
Non-GAAP adjusted EBITDA
99,257
67,909
356,479
262,610
Foreign currency impact on Non-GAAP adjusted EBITDA(6)
(716)
1,326
(7)
6,305
Non-GAAP adjusted EBITDA on constant currency basis(6)
$ 98,541
$ 69,235
$ 356,472
$ 268,915
Non-GAAP adjusted EBITDA margin on constant currency basis
33.5 %
32.2 %
Rule of 40 on constant currency basis(7)
40.4 %
37.1 %
(1)
Includes amortization expense related to software and content development costs, and amortization expense from capitalized cloud computing implementation costs.
(2)
Measured by GAAP revenue divided by non-GAAP EBITDA.
(3)
See additional details in the reconciliation of GAAP to Non-GAAP operating income above.
(4)
Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA.
(5)
Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table above.
(6)
To determine non-GAAP adjusted EBITDA on a constant currency basis, non-GAAP adjusted EBITDA from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period’s quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.
(7)
Measured by non-GAAP organic revenue growth on constant currency basis plus non-GAAP adjusted EBITDA margin on constant currency basis.
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)
(dollars in thousands)
Years ended
December 31,
2023
2022
GAAP net cash provided by operating activities
$ 199,634
$ 203,893
GAAP operating cash flow margin
18.1 %
19.3 %
Non-GAAP adjustments:
Less: purchase of property and equipment
(4,685)
(12,289)
Less: capitalized software and content development costs
(59,443)
(58,774)
Non-GAAP free cash flow
$ 135,506
$ 132,830
Non-GAAP free cash flow margin
12.3 %
12.6 %
Non-GAAP adjustments:
Add: Security Incident-related cash flows, net of insurance
78,010
20,864
Non-GAAP adjusted free cash flow
$ 213,516
$ 153,694
Non-GAAP adjusted free cash flow margin
19.3 %
14.5 %
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SOURCE Blackbaud
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PyTorch Foundation Welcomes Nine New Members As Momentum Builds Around Open Source AI Center of Gravity
Published
8 minutes agoon
October 20, 2026By
New Platinum members include Nebius, Nscale and Shopify, deepening the PyTorch Foundation’s role as the intelligence layer for open source AI development
SAN JOSE, Calif., Oct. 20, 2026 /PRNewswire/ — The PyTorch Foundation, a community-driven hub for open source AI under the Linux Foundation, today announced the addition of nine new members at PyTorch Conference North America 2026. Expansion of the PyTorch Foundation ecosystem signals increased advancements to come in open source AI, with the foundation serving as a compounding hub for innovation.
The Foundation welcomes the following new members:
Platinum: Nebius, Nscale, and Shopify Inc.Silver: LightSeek Foundation and Lablup Inc.Associate: SKOPOS INDIA FOUNDATION, Siksha ‘O’ Anusandhan, Messiah University, and Valencia College
AI innovation now happens across all stack layers simultaneously, with research, models, infrastructure, hardware, and production continuously driving each other forward. The PyTorch Foundation serves as the central hub of this interconnected ecosystem, uniting researchers, developers, and companies building open AI. Membership growth advances PyTorch as the critical enabler of AI hardware, with the future of AI innovation built on projects like PyTorch, vLLM, DeepSpeed, Ray, Helion, and Safetensors.
“Open systems learn faster when more people, projects, and organizations are working together, creating compounding gains,” said Mark Collier, executive director of the PyTorch Foundation. “Open source ecosystems let breakthroughs travel between organizations instead of staying locked inside one company. We are thrilled that these new members will share their advancements with the foundation in the pursuit of accelerated, open intelligence.”
Ecosystem Growth: PyTorch Foundation Member News
Recent milestones across the PyTorch ecosystem highlight how AI itself is joining the learning loop to improve code, kernels, and research workflows. Updates include:
Bringing ExecuTorch to Arm Cortex-M CPUs – ExecuTorch now provides a direct path from PyTorch training to on-device inference. The Cortex-M backend enables PyTorch models to run directly on Arm Cortex-M CPUs with Arm CMSIS-NN acceleration. It supports all capability tiers (Scalar, DSP, and MVE/Helium) from a single workflow.The announcement of TorchNeuron –TorchNeuron is an open source native PyTorch backend for AWS Trainium (and corresponding Amazon EC2 instances: Trn2 and Trn3), enabling AI researchers and practitioners to experiment and run PyTorch workloads with a single configuration change. With eager execution, torch.compile, and native support for PyTorch APIs (DTensor, torch.distributed) and libraries like TorchTitan, TorchNeuron enables workflows from research experimentation to production deployment.Native PyTorch is now publicly available for TPUs – Google is proud to announce TorchTPU, native PyTorch for TPU developers, enabling developers to deploy models on TPUs with minimal code changes and access popular ecosystem projects (vLLM, SGLang, Ray, LLM-d).Extending Inductor for the IBM Spyre Accelerator – In a recent blog, IBM’s AI-native Spyre software stack extends PyTorch’s Inductor compiler and native runtime, reducing Spyre-specific compiler code by 7x while maintaining performance parity on tested workloads. AI-assisted development enabled support for thousands of models with just 44 adapters and approximately 10,000 lines of code, complemented by hardware-agnostic vLLM integration and continuous testing against upstream PyTorch updates.A new case study in which Shopify built a continual learning loop with PyTorch and vLLM – Using a continual learning loop with PyTorch and vLLM, Shopify compresses production failures into model weights every day, beating frontier-model quality, and cutting serving costs by 96%.
The open source community is gathering in San Jose for PyTorch Conference North America this week. From bare-metal infrastructure to applications and agents, the conference covers the entire AI stack, exploring the interconnected system building AI in the open. The foundation brings together practitioners focused on training, inference, kernel engineering, and responsible AI work, creating a hub for the future of open intelligence.
To learn more about the next breakthrough in open source AI, visit https://pytorch.org/foundation.
Supporting Quotes
“Lablup has built Backend.AI as an open-source project from the beginning, and PyTorch workloads run on our platform every day. We have benefited greatly from the PyTorch ecosystem over the years. Joining the PyTorch Foundation is our way of supporting the community that has helped us grow and contributing what we have learned from operating AI infrastructure at scale.”
– Jeongkyu Shin, Co-founder and CEO, Lablup Inc.
“Efficient inference is essential to making AI accessible at global scale, and we believe the infrastructure behind it must be open. PyTorch brings developers, researchers, and hardware innovators together around a shared foundation. Joining the PyTorch Foundation allows us to contribute directly to that ecosystem and help turn advances in models and hardware into practical improvements in performance, cost, and accessibility for the next generation of AI applications.”
– Yineng Zhang, President and Governing Board, LightSeek Foundation
“At Nebius, we believe the future of AI depends on a strong, connected ecosystem, from training to deployment. Joining the PyTorch Foundation as a Platinum member allows us to collaborate more deeply with the community and contribute our expertise in high-performance infrastructure and applied AI. Together, we can help developers and enterprises move more easily from experimentation to production and scale their AI applications.”
– Ryan Hanrui Wang, Senior Vice President, Applied AI, Nebius
“Most infrastructure providers treat the framework and the data center as two separate problems. We treat them as one. PyTorch has remained the base layer of AI because it kept the Pythonic style researchers know, while getting serious about performance. Ray, also part of the PyTorch Foundation, does something different: getting that work to run across thousands of GPUs. With Anyscale, the creators of Ray, set to join Nscale, we’re not just using that ecosystem, we’re building the infrastructure underneath it. Joining the PyTorch Foundation as a Platinum member is us backing that directly, not just benefiting from it.”
– Nick Jones, VP of Cloud Native Platform Engineering, Nscale
About the PyTorch Foundation
The PyTorch Foundation is the vendor-neutral home for the open source intelligence layer developers use for training, optimizing, serving, and running models on any chip in any cloud for any agent. As a community-driven hub hosted by the Linux Foundation, the PyTorch Foundation supports the core PyTorch framework alongside a growing portfolio of innovative projects including vLLM, DeepSpeed, Ray, Helion, and Safetensors. Through open governance, strategic support, and a global contributor community, the PyTorch Foundation empowers developers, researchers, and enterprises to build and deploy AI at scale. Learn more at https://pytorch.org/foundation.
About the Linux Foundation
The Linux Foundation is the world’s leading home for collaboration on open source software, hardware, standards, and data. Linux Foundation projects, including Linux, Kubernetes, Model Context Protocol (MCP), OpenChain, OpenSearch, OpenSSF, OpenStack, PyTorch, Ray, RISC-V, SPDX and Zephyr, provide the foundation for global infrastructure. The Linux Foundation is focused on leveraging best practices and addressing the needs of contributors, users, and solution providers to create sustainable models for open collaboration. For more information, please visit us at linuxfoundation.org.
The Linux Foundation has registered trademarks and uses trademarks. For a list of trademarks of The Linux Foundation, please see its trademark usage page: www.linuxfoundation.org/trademark-usage. Linux is a registered trademark of Linus Torvalds.
Media Contact
The Linux Foundation
pr@linuxfoundation.org
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SOURCE PyTorch Foundation
Technology
West Monroe Marks Third Annual Innovation Week by Showcasing Employee-Built AI Solutions and Investing in Future Innovators
Published
8 minutes agoon
October 20, 2026By
Firm offers a public window into its internal AI Marketplace of 600+ employee-built solutions and announces AI education partnership with the Mark Cuban Foundation.
CHICAGO, Oct. 20, 2026 /PRNewswire/ — West Monroe, an AI-native global consulting firm, is marking its third annual Innovation Week by showcasing how employee-led innovation is transforming the way the firm works, creating measurable value for clients, and inspiring the next generation of AI builders.
Taking place October 19–23, the week brings employees and leaders together to share innovations, collaborate on new ideas, and explore opportunities to turn promising solutions into lasting business value. The weeklong event reflects the firm’s broader approach to innovation: giving all employees the tools, resources, and opportunities to build solutions that can be scaled within the organization and for clients.
Giving the Public a Window into Employee-Led AI Innovation
For the first time, West Monroe is giving the public a look inside its internal AI Marketplace, a centralized collection of employee-created AI applications, super prompts, skills, demos, and other solutions.
West Monroe encourages everyone, regardless of technical background, to build with AI. The firm makes most of its AI tools, including Codex and Google AI Studio, available to all employees across the firm, empowering them to create their own solutions. Employees can then submit their innovations to the AI Marketplace, where approved solutions become available for others to discover, use, and build upon—saving time, sparking inspiration, and eliminating duplicative rework.
Examples of select applications featured in the public-facing experience include:
Prompt Clarity Coach: Guides users through a three-step process to turn new ideas into clearer, more effective AI prompts, helping them get better results from AI tools.Professional Development Planner: Helps people identify career goals, explore opportunities to develop new skills, and create personalized, actionable plans for professional growth.Restaurant Menu Insights Demo: Based on a demo developed for a client, this application analyzes restaurant menus to identify ingredient opportunities and product substitutions, connecting menu items to opportunities for growth, greater operational efficiency, consistency, and improved margins.
Additionally, the firm has mobilized a community of advanced AI builders, now representing 15% of West Monroe’s workforce. The Builder Community develops delivery assets and reimagines how the firm serves clients through AI.
“The people closest to the work often have the best ideas about how to make it better, and AI is making it possible for everyone, technical or not, to bring those ideas to life as tools and apps,” said Bret Greenstein, Chief AI Officer at West Monroe. “We’ve given our people the freedom to solve problems themselves, and they’ve built more than 600 solutions and counting to improve how we work and deliver value to clients. This is what being AI-native actually looks like: people at every level using AI to rethink how work gets done, sharing what they’ve created, and making the entire organization better.”
The public-facing experience builds on the June launch of westmonroe.ai, the firm’s public platform offering business leaders access to AI agents that help tackle strategic challenges, from assessing business model risks to evaluating AI readiness and talent strategies.
The firm’s internal AI Marketplace has already been featured in Business Insider and CIO.com.
Turning Employee Innovation into Business Value
Innovation Week also provides an opportunity for West Monroe employees to collaborate and turn ideas into practical solutions through the firm’s innovation competitions.
This year’s Innovation Week competition challenges teams to develop more effective ways of advancing the firm’s growing portfolio of technology assets, including how enhancements are prioritized, ownership is established, user experiences are improved, and feedback is incorporated. Participating teams will demonstrate approaches to help West Monroe scale promising solutions and continuously improve the value they deliver.
The competition has a track record of producing commercially successful solutions. During West Monroe’s 2024 Innovation Week, a team developed a prototype that became Intellio® Hopper, an AI-powered data modernization solution that reduces the time required to convert data for platforms like Databricks by 80%. Since its inception, the solution has generated about $50 million in sales.
“Some of our most valuable solutions started with employees seeing a problem and deciding there had to be a better way to solve it,” said John Rosato, Head of Technology at West Monroe, who is serving as a sponsor and judge for the Innovation Week competition. “Assets are a big part of how West Monroe is different and delivers faster, better results for clients. They allow us to take our expertise and turn it into something repeatable and scalable, which is why this innovation challenge is about investing in their acceleration.”
Finalists will present live demonstrations at the conclusion of Innovation Week, with winners receiving cash prizes.
Investing in the Next Generation of AI Builders
West Monroe is also extending its commitment to making AI innovation widely accessible through a partnership with the Mark Cuban Foundation.
The firm will host AI bootcamps for high school students this fall, which will introduce students to AI tools, ethics, and real-world applications through hands-on activities and a final capstone project. The Mark Cuban Foundation provides the curriculum and technology resources, while West Monroe hosts the program and provides employee volunteers as mentors.
“As AI continues to become an undeniable force in all of our lives, it’s crucial that we open the door to this knowledge, especially to young people who want to explore it,” said Mark Cuban, Founder of the Mark Cuban Foundation. “While technology expands and becomes more advanced, it becomes more critical that we ensure our students are prepared when they apply for schools or jobs in the future. Thanks to our work with West Monroe, the bootcamp will offer an avenue to explore this fascinating field of technology to any student, no matter their means.”
The partnership supports West Monroe’s mission to build the next generation of leaders and reflects the firm’s belief that the ability to understand, use, and build with AI should extend beyond traditional technical roles and backgrounds.
West Monroe’s commitment to AI innovation has earned significant industry recognition in 2026. The firm was named Overall AI Consulting Firm of the Year by the AI Breakthrough Awards, received a Gold Stevie® Award for AI-Driven Culture of Innovation at the Stevies American Business Awards, and was recognized by Forbes as one of America’s Best Management Consulting Firms, including for its AI consulting capabilities. Chief AI Officer Bret Greenstein was also named an AI Leader of the Year in the Stevie Awards.
For more information and to explore West Monroe’s public AI Marketplace preview, visit westmonroe.ai/ai-marketplace.
About West Monroe
West Monroe is an AI-native global consulting firm built for today’s pace of change. We combine deep industry expertise with modern technology and business transformation capabilities to help organizations move faster and deliver measurable impact with speed to value and certainty of results through execution excellence. We don’t just talk about what’s possible—we apply AI and technology where it matters most, pairing strategic insights with hands-on execution to help clients move from strategy to results, faster.
Clients tell us we show up differently. Our employee ownership model fuels an all-in approach grounded in practical execution, measurable impact, and lasting partnership. That commitment has earned recognition from Forbes and Business Insider and made West Monroe one of only 22 companies recognized worldwide for building high-quality careers.
See what’s possible at westmonroe.com.
Media Inquiries
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Director, Communications & Public Relations
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SOURCE West Monroe
Technology
Carpool Logistics Rolls Out Carpass, a Patent-Pending Secure Vehicle Release System, at No Additional Cost on Every Shipment
Published
8 minutes agoon
October 20, 2026By
Identity-verified, location-validated, time-limited release closes the gap between carrier assignment and physical handoff; full rollout across the Carpool network by year-end
ATLANTA, Oct. 20, 2026 /PRNewswire/ — Carpool Logistics, the vehicle logistics platform for dealerships, auctions, fleets, and OEMs, today announced the rollout of Carpass™, a patent-pending secure vehicle release system that ties every release to a verified driver, a validated pickup location, and a time-limited digital credential. Carpass joins carrier vetting, live GPS tracking, geo-tagged inspection photos, account-takeover monitoring, and role-based access controls in Carpool’s layered defense against fraud. It is rolling out across the Carpool network now, will be fully deployed by the end of 2026, and is included at no additional cost on every Carpool shipment.
A gate pass clears the vehicle. It does not clear the driver. Paper gate passes get forwarded, screenshots get reused, and at most dealerships a porter hands keys to whoever arrives with the right name. That gap between carrier assignment and physical handoff is where fraud, theft, and disputes live.
Carpass closes it. Before a vehicle is released, the driver’s identity must be verified against a government-issued ID and a live face match, the driver must be inside the pickup geofence, and the release credential must be active and unexpired. If any one fails, the vehicle does not move. At auctions, Carpass validates the driver against the existing gate pass. At dealerships, it creates a documented handoff where none existed.
“We’re in the trust business. A customer hands us a vehicle and expects it to leave the lot with the driver we assigned, not someone holding a forwarded gate pass,” said Mike Malakhov, Co-Founder and CEO of Carpool Logistics. “Carpass is how we prove that at the gate. We’re including it on every shipment because that trust shouldn’t cost extra.”
First-time drivers complete a one-time identity verification in the Carpool driver app. Once verified and inside the pickup radius, they receive the vehicle release details and a time-limited, encrypted QR code. Gate staff scan it with any smartphone camera, no app or login required, and see the driver’s verified name, photo, company, DOT number, and assigned vehicles. Codes cannot be screenshotted, forwarded, or reused, and every verification attempt and release is logged in a complete audit trail. The system also protects drivers from unauthorized use of their DOT numbers and identities and has already stopped attempted fraud during its pilot phase.
“Carpass runs on one rule: verify the driver, confirm the location, and enforce the time limit at the same moment, or the vehicle doesn’t move,” said Joe Norton, VP of Product at Carpool Logistics. “Every layer of the system, from the encrypted release codes to the geofence to the biometric match, exists because a gate pass clears the vehicle, not the person driving it away.”
Carpass requires no additional hardware or software for shippers or gate staff. Carpool has filed a patent application covering its multi-factor verification architecture. For more information, visit https://www.carpoollogistics.com/carpass.
About Carpool Logistics
Carpool Logistics is a vehicle logistics platform that moves cars for dealerships, auctions, fleets, and OEMs. Founded in 2021 and headquartered in Atlanta, Carpool runs pricing, dispatch, tracking, and documentation in a single proprietary platform built for vehicles, with every shipment executed by one of more than 13,000 vetted carriers, tracked in real time, and documented at the VIN level. Carpool has delivered more than 450,000 vehicles, including 210,000+ in the past twelve months, with a 99.8% claim-free rate in 2025. Learn more at www.carpoollogistics.com.
Media Contact:
Austin Bryan
Head of Marketing, Carpool Logistics
austin.bryan@carpoollogistics.com
(404) 666-7136
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SOURCE Carpool Logistics
PyTorch Foundation Welcomes Nine New Members As Momentum Builds Around Open Source AI Center of Gravity
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